P. PUNNIAH versus JEYPORE SUGAR CO. LTD. AND ORS.

Citation: [1994] 3 S.C.R. 385 · Decided: 06-04-1994 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

"' 
P. PUNNIAH 
A 
v. 
JEYPORE SUGAR CO. LTD. AND ORS. 
APRIL 6, 1994 
[B.P. JEEVAN REDDY AND B.L. HANSARIA JJ.J 
B 
Companies Act, 1956-Ss.397, 398, 399(1) (a) a11d (3}-Conse11t by 
General Power of Attomey GPA holder 011 behalf of member to file applica-
tion--Held, constitutes valid conse11t-S.399(3)-Whether an exceptio11 to the 
normal rule of agency-Affidavit filed by member i11 High Court that she had c 
authorised the GPA holder--Wliether to be take11 as consent-Con1pany 
(Court) Rules 195')--R.88 
In October 1978, three shareholders of the respondent'.company 
including the first appellant filed an application under Ss.397/398 in the 
High Court. The first appellant, P was General Power of Attorney holder D 
for his daughter, R who was resident in the USA. The statutory require-
-' 
ment of l/lOth share-holding needed to file the said application was 
admittedly satisfied if this consent was valid. 
~ 
A preliminary objection, that the consent had to be by the member 
personally and not by the GPA holder, was raised. In proceedings before E 
the High Court, R filed an affidavit, int~r alia, clarifying that she had 
authorised her father to act on her bahalf in the matter. The Company 
Judge and the Division Judge, however, sustained the objection. Hence this 
appeal. 
' 
F 
l 
Allowing the appeal, 
HELD (By the Court) : l. The consent given by the GPA holder on 
behalf of the member constitutes a valid consent, in view of the ."'~cts and 
circumstances of the present case. [394-F] 
G 
Per Jeevan Reddy, J. 
2. Section 399 of the Companies Act, 1956 or sub-section (3) thereof 
• 
does not either expressly or by necessary implication indicate that the 
consent to be accorded thereunder should be given by the member per· 
sonally. [390-G] 
H 
385 
A 
B 
c 
D 
386 
SUPREME COURT REPORTS 
[1994] 3 S.C.R. 
3. Section 399(3) is no exception to the normal rule or agency. The 
normal rule is that whatever a person can do himself, he can do it through 
his agent, except certain functions which may he personal in nature or 
otherwise do not admit or such delegation. The consent contemplated by 
Section 399(3) falls under the general rule and not under the exception. 
[391-C] 
4. Rule 88 or the Companies (Court) Rules 1959 does not in any 
manner indicate that the consent should be given by the member personal· 
ly. It only requires that the letters of consent signed by the consenting 
members shall be annexed to the petition alongwith their names and 
addresses and other prescribed particulars. [392·B] 
Killick Nixon Ltd.v. Bank of India, (1985) 57 Com Cas 831, approved. 
Makhan Lal Jain v. Amrit Banaspati Co. Ltd., AIR (1953) All 326, 
Charanjit Lal Chowdhury v. Union of India, AIR ( 1951) SC 41 and R. Subba 
Rao v. CIT, Madras, AIR ((1956) SC 604, distinguished. 
5. The preliminary objection to the maintainability of the application 
filed under Section 397/398 is unsustainable in law. [394-F] 
Per Hansaria, J. (concurring) : 
E 
6. The respondent may be correct on the legal question under con· 
sideration. But, in view of the affidavit filed by the member clarifying that 
she had authorised her father to act on her behalf in the matter at hand, 
the application under Section 397/398 or the Companies Act 1956, as filed 
in the court, ought to be taken as one to which she had consented. 
F 
[pp. 394-H; 395·A] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1899 of 
1981. 
From the Judgment and Order dated 27.2.81 of the Orissa High 
Court in A.H.0. No. 14 of 1980. 
G 
Vinod Bhagat for the Appellant. 
G.S. Srinvivasa Rao for the Respondent. 
The Judgment of the Court were delivered by 
H 
B.P. JEEVAN REDDY, J. An application under sections 397/398 of 
' 
! 
., 
·' 
,, 
) 
PUNN!Afl v. JEYPORE SUGAR CO. (JEEV AN REDDY, J.] 
387 
the Companies Act, 1956 can be filed inter alia by "any member of members A 
holding not less than one-tenth of the issued share capital of the Company" 
- vide clause (a) of sub-section (1) of section 399. Sub-section (3) of section 
399 says that among the members of the Company entitled to make an 
application by virtue of sub-section (1) "any one or more of them having 
obtained the consent in writing of the rest may make the application on 
behalf and for the benefit of all of them". 
The three appellants in this appeal are the share-holders of the first 
respondent-company, Jeypore Sugar Company Limited. The Respondents 
B 
are its Directors. The first appellant's daughter Smt. V. Rajeshwari
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